Bullish IBM calls

By Elliott Robinson On January 21, 2012 · Leave a Comment

This Trade Was Closed February 1, 2012

This trade performed as expected; there is probably more upside, but taking profits now makes sense because it reduces my risk to nothing. Closing this out at $9.45. Original cost $6.80; not including commissions, that’s about 38% profit, not too shabby. Not being greedy is the key to profitable trading for my trading style. Know thyself.

Original Trade Post:

Note: This is a paper trade. I’m going to paper trade for a month or two just to refine my strategy and tactics.

IBM is a great company. The company’s most recent earnings announcement was good too.

Ideally, I would have bought the calls before the earnings announcement (taking a bet that it would be good), and in the ideal world I would also have a wizard hat and turn Charging Bull in Bowling Green Park into a real bull, then put a saddle on it and charge kids 25 cents to ride it. Traders would be charged $2500.

My plan is to ride the upside until I feel I have a reasonable profit. Typically if I get too greedy or find myself saying “just wait for another 20%”, my trade ends up being in my waste basket of terrible trades (or should I call it my dumpster?).

I bought the calls at $6.80 today just before market close. NB: Paper trade!!!

Option Trade Details:

The Ticker:	IBM	VN:F [1.9.14_1148] please wait...	VN:F [1.9.14_1148] 5.0 (2 votes)
The Trade:	Buy to Open Jul 2012 195 Calls at 6.80 or better.
		Trade Closed:	February 1, 2012